In Brief

The Problem

Sweeping environmental, social, and business trends have propelled energy up the corporate agenda. But most firms still approach energy as merely a cost to be managed.

The Solution

Companies need a cohesive energy strategy that reduces risk, improves resilience, and creates new value.

Key Steps

Companies must create a C-level mandate, integrate energy goals into their vision and operations, track progress companywide, tap new technologies, and engage stakeholders. These steps are not revolutionary—but systematically applying them to a company’s energy use is.

Large companies spend millions, or billions, of dollars directly on energy each year—and millions more indirectly, on supply chain, outsourcing, and logistics costs. Yet outside the most energy-intensive industries, the majority of firms approach energy as merely a cost to be managed. This is a strategic mistake that overlooks enormous opportunities to reduce risk, improve resilience, and create new value.

A version of this article appeared in the January–February 2017 issue (pp.138–146) of Harvard Business Review.